Cann Social Tonics co-founders Jake Bullock and Luke Anderson saw a big opportunity when they surveyed the cannabis beverage market in states where cannabis is legal about three years ago.
Drinks containing THC as the main intoxicant were usually sold in single servings, with more than enough active ingredients to create a buzz for cannabis enthusiasts.
Both Bullock and Anderson thought they would target their drink start-up Cann Social Tonics to a much wider audience of casual drinkers interested in trying something different, but not debilitating – sold in six-packs, just like the sodas and beer.
Fast forward, and Cann is one of the top-selling THC-infused beverages in the United States, with a roughly 25% share in California.
Cann continues to stand out by delivering a hangover-free social kick and one-third the calories of beer.
“There’s no substitute for what we do,” Cann co-founder Anderson told GameSpot. “About 80% of adult drinkers want to drink less [alcohol]. We meet them where they are.
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Cann’s products are now offered in approximately 600 stores in cannabis-legal states as well as direct-to-consumer on drinkcann.com, with rapid growth expected in the near future.
Beer makers are studying the market and Cann has been meeting with them for potential joint ventures, said Anderson and Cann CEO Bullock.
Cann already has a joint venture in Canada, where its drinks are made by Truss Beverage, which is backed by Hexo Corp. HEXO, -1.87% and Molson Coors Canada TAP, +0.95%.
Cann Social Tonics raised a $27 million seed round in February with backing from Imaginary Ventures and Green Thumb Industries GTBIF, +4.75%, and has since raised $10 million from the same investors. The company’s full legal name is California-based Socali Manufacturing Inc., but it operates as Cann.
It ends the year with 55 employees and expected sales of over $10 million. It has no plans to go public and is already generating cash flow, so it has enough capital and is not burning through cash quickly, the founders said.
Jake Bullock and Luke Anderson, co-founders of Cann Social Tonics
Can
As Anderson and Bullock look to 2023, they expect to grow Cann’s presence in New York and New Jersey.
With restrictions for cannabis on TV and online destinations, Cann relies on proven methods to introduce the product to potential customers by offering samples at dispensaries and events, as well as word-of-mouth. ear via Cann evangelists and 45 celebrities. shareholders.
Kate Hudson, a shareholder, endorsed the drink to highlight Cann’s appeal to traditional social drinkers. Rosario Dawson, an actress also known for her political advocacy, serves on Cann’s board of directors.
Inspired in part by Britney Spears’ famous Super Bowl commercial for PepsiCo PEP, +0.65% as well as the 1970s hit song “Lady Marmalade”, Cann also produced a video, “Taste So Good (The Cann Song)”, directed by Jake Wilson.
The video for the song, performed by singer-songwriter and producer Mnek, features Kenworthy, Sarah Michelle Gellar, Hayley Kiyoko, Vincint and Patricia Arquette. They are joined by the top contestants from Season 14 of RuPaul’s Drag Race: Kornbread, Kerri Colby, Jorgeous and Willow Pill.
The song was one of Spotify’s New Music Friday Top Picks and has been streamed 5 million times.
“People didn’t know it was a promotional video — it was just a fun thing to watch,” Bullock said.
Cann also supports an active social equity program, with an emphasis on corporate social responsibility. He said he dedicates 1% of his income to supporting entrepreneurs of color in the cannabis industry and has also raised money for local groups.
When Jake Bullock and Luke Anderson launched Cann in 2019, the cannabis beverage space was virtually non-existent.
High-dose cannabis products were all the rage, and “regressive heteronormative branding and marketing permeated much of the cannabis, alcohol and beverage industries,” Bullock said.
Cann for Bullock’s inspiration came from his experience living in Colorado, where he saw cannabis products including vapes, edibles, flowers, and beverages. Existing drinks generally contained higher amounts of THC.
He thought it would be possible to aim for a low-THC product for people who socially consume alcoholic products. He got into the cannabis business after working at a private equity firmBain Capital and began using his prowess as an entrepreneur to start his own business.
Bullock said he was also inspired by the achievement of GT’s Living Foods LLC’s Kombucha brand, which paved the way for the transformation of a traditional Asian beverage into a new $5 billion beverage category.
Anderson worked as a consultant at Bain & Co. where he focused on helping large beverage companies behave more like startups.
He said he had had enough of the hangover after drinking and experimented with replacing some of the alcohol with a snack on a candy and flushing it down with seltzer water.
Anderson applied some of the startup tools he used at Bain & Co. and helped launch Cann.
Anderson said he was influenced by the success of Spindrift Beverage Co. Inc., the company that helped launch the fortified seltzer category.
Instead of 10mg or more per bottle, Cann offered a microdose of 2mg of THC combined with 4mg of CBD in each can.
Anderson said Cann products helped him reduce his drinking from about 25 drinks a week to 15.
Cann’s eight-ounce six-packs sell for $24, but the price will likely come down over time as economies of scale improve in the business and ingredient costs come down.
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